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Paris Club: Governors Opposes FG Plans On Fund Deduction

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Following the persistent crisis that is yet to be sorted out, over the plans by the Federal Government to deduct four hundred and eighteen million dollars ($418) Paris Club Refund from the Federation Account, the 36 Governors under the aegis of the Nigeria Governor's Forum (NGF) renewed opposition against FG's unilateral decision to deduct the fund from the treasury. They maintained that the “deduction of the allocations due to the 36 States of the Federation from the Federation Account to liquidate the London/Paris Loan refund-related judgment debts is the subject of an Appeal filed by the 36 States of the Federation at the Court of Appeal Abuja.

According to the NGF Counsels, the Federal Government’s notice via a letter with Reference No: FMFBNP/SGOVS/DEDUCTION/PCL/11/2021 dated 11th November 2021 to commence deduction from allocations due to the States from the Federation Account for the liquidation of London/Paris Club refund-related judgment debts on behalf of the 36 States of the Federation and the 774 Local Government Councils, was unconstitutional.

According to the letter, “the States of the Federation were not parties to any contract or suits concerning the London/Paris Club refund, from which they said judgment debts arose. Consequently, the 36 States of the Federation are not liable to any person or entity in any judgment debt.”

The sub-national governments’ position was contained in a letter dated 1st August 2022 addressed to the Secretary to the Government of the Federation (SGF) Secretary to the Federal Executive Council (FEC), titled: ‘Re: The unconstitutionality of deducting USD 418 million from Paris Club Refund from the Federation Account in favor of Contractors’.

Meanwhile, the cases are on hold and no steps are taken to enforce the judgment and alter the status quo pending when issues are fully determined. A Caveat issued to restrain all parties concerned and the public from dealing or honoring Promissory Notes issued had earlier been published.